1       Parent

Parent is the entity that has control over other entity. Parent can have many subsidiaries.

2       Subsidiary

Subsidiary is the entity controlled by the parents. Subsidiary only has one parent.

3       Control

Control is ability to take strategic, operational and financing decisions of an entity.

Control can be obtained through following means:

  1. Holding more than fifty percent shares in a company.
  2. Ability to cast more than fifty percent votes in AGM.
  3. By the order of court.
  4. Ability to influence dividend payments.

4       Group

Group is the combination of parent and its subsidiaries.

Consolidated or group financial statements are combine financial statements of parents and its subsidiaries.

“Consolidated financial statements are the financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity”. IAS 27 Separate Financial Statements.

“Separate financial statements are those presented by a parent (i.e. an investor with control of a subsidiary) or an investor with joint control of, or significant influence over, an investee, in which the investments are accounted for at cost or in accordance with IFRS 9 Financial Instruments”. (IAS 27 Separate Financial) Statements

5       Non-Controlling Interest

Equity in a subsidiary not attributable, directly or indirectly, to a parent.

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